Description: The proposed research will examine how the use of specialist referrals and services may be affected by payment organization, focusing specifically on a comparison of the use of vision care specialists for Medicare patients in fee-for-service (FFS) versus capitated (CAP) managed care settings. Medicare patients were selected for analysis because of the likelihood of rapid movement of Medicare beneficiaries into managed care. Vision care was selected for analysis because of the prevalence of treatable vision problems among the elderly associated with significant health problems and because referrals for specialty care occur largely in an ambulatory setting and may be vulnerable to incentives to reduce specialist use. The three specific aims are: (1) to determine whether there are differences in the referral and treatment patterns and in costs attributed to vision care between Medicare beneficiaries in managed care to those under FFS; (2) to assess whether Medicare beneficiaries with visual complaints in managed care relative to those under FFS have greater vision-related disability or unmet needs; and (3) to determine whether the content and/or costs of vision care are affected by the type of risk-sharing arrangements in capitated Medicare managed care plans, specifically, plans in which only the primary care physician is capitated (CAP-FFS) and at full risk for the provision of specialty care versus plans in which the primary care physician and specialist are in the same financial risk pool (CAP-CAP) for plans covering vision services. A sample will be drawn from the Health Care Financing Administration (HCFA) beneficiary plan and from the master files of HCFA Group Health Plan. Only group health plans that provide for routine visual screening will be included, but distinctions in risk sharing arrangements as capitation or shared risk pool will be ensured. Data will be analyzed to test the following hypotheses: (1) that compared to FFS, managed care participants will have higher rates of screening, refraction, and replacement of eye glasses; fewer referrals and cataract surgical procedures, and poorer perceived access to care; and lower out-of-pocket and overall expenses; (2) patients in managed care will have greater severity of correctable vision problems (refractive error or cataracts), poorer visual functioning and health related quality of life, and longer waiting times for appointments and less satisfaction with access and more costs; and (3) that after adjusting for case mix, patients in CAP-CAP plans compared to CAP-FFS plans have fewer visits, lower procedure use, and lower costs. Specific models for testing hypotheses are not given.